ASIC’s bold step in regtech
ASIC has kicked off a series of regtech industry workshops aimed at helping the corporate regulator source ideas and possible use cases for its compliance agenda in what is described as a “bold step” by its commissioner, Cathie Armour.
Monitoring financial advertising was the first theme behind its regtech workshop held in Sydney on Friday and included demonstrations from four regtechs.
“Today’s problem-solving demonstration and symposium exploring Monitoring Financial Promotions is a bold new step in ASIC’s engagement with the regtech sector,” Armour said.
Quoting a view from her colleague John Price, Cathy said that “regtech has the potential to deliver a flawless consumer experience that is safe.”
Since 2016, the corporate regulator has stepped up its focus on regtech.
“We did this, in part, because regtech is about the of use new technologies to solve regulatory and compliance requirements more effectively and efficiently – an issue dear to our heart as a conduct regulator,” Armour said.
Through discussions with the regtech sector including roundtables, forums and face-to-face meetings, Armour said the key message for ASIC was to “keep an open mind” on the potential of the sector.
Indeed, for the commissioner this mantra was “a driver in ASIC establishing this current series of events”.
Using some of its “special purpose regtech funding” it received from the government, ASIC will use these forums to “set the industry a series of challenges, provide some fundamental building blocks, and to see how you have responded”
The aim of first session was to look at how regtechs can improve compliance standards for promotions across the banking, finance and credit industry.
Their success will be measured by how much of a glimpse into the future they offer”
The regtechs that were involved in the demonstrations were Cognitive View; Law of the Jungle; Red Marker; Sintelix and Visteo.
The solutions were varied but they took either preventive or proactive approach to monitoring advertising standards in the industry.
The common compliance breaches revealed by the regtechs were the lack of comparison rates on websites and lack of disclaimers.
ASIC’s next two regtech events will address issues in financial advice (held in Sydney in August) and voice analysitcs (held in October).
Armour said the regulator is determined to listen and learn from the sector – a view she said is consistent with other regulators around the world.
Here she highlighted a number of initiatives already being adopted by the Financial Conduct Authority in the UK, and the Singapore Monetary Authority.
Closer to home Austrac and APRA were also proactive in regtech.
In fact it was a theme already highlighted at the RegTech Association’s annual conference this year.
It was signalled at the event that the regtechs involved in the first workshop would not necessarily lead to a commercial agreement with the regulator, rather the aim was to assess how regtech could be used to better monitor financial promotions.
Armour acknowledges that ASIC is “uncertain of the full future potential of regtech”.
However, “the success of this month’s events (and future ones) will not necessarily be measured by the volume of data analysed, or by the accuracy of the solutions demonstrated.
“Instead, their success will be measured by how much of a glimpse into the future they offer” adding that the regulator will “reflect on everything seen and heard today”.
“By approaching every one of these initiatives with an open mind, we will continue to be one step closer to either a definitive answer, a fundamental innovation, or a set of tools and solutions that do indeed 'deliver flawless consumer experiences that are safe.'